Correlation Between Innovative Medical and Wuxi Chemical
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By analyzing existing cross correlation between Innovative Medical Management and Wuxi Chemical Equipment, you can compare the effects of market volatilities on Innovative Medical and Wuxi Chemical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Innovative Medical with a short position of Wuxi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovative Medical and Wuxi Chemical.
Diversification Opportunities for Innovative Medical and Wuxi Chemical
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innovative and Wuxi is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Innovative Medical Management and Wuxi Chemical Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wuxi Chemical Equipment and Innovative Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Innovative Medical Management are associated (or correlated) with Wuxi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wuxi Chemical Equipment has no effect on the direction of Innovative Medical i.e., Innovative Medical and Wuxi Chemical go up and down completely randomly.
Pair Corralation between Innovative Medical and Wuxi Chemical
Assuming the 90 days trading horizon Innovative Medical is expected to generate 1.12 times less return on investment than Wuxi Chemical. In addition to that, Innovative Medical is 1.47 times more volatile than Wuxi Chemical Equipment. It trades about 0.09 of its total potential returns per unit of risk. Wuxi Chemical Equipment is currently generating about 0.15 per unit of volatility. If you would invest 2,191 in Wuxi Chemical Equipment on October 18, 2024 and sell it today you would earn a total of 1,285 from holding Wuxi Chemical Equipment or generate 58.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovative Medical Management vs. Wuxi Chemical Equipment
Performance |
| Timeline |
| Innovative Medical |
| Wuxi Chemical Equipment |
Innovative Medical and Wuxi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovative Medical and Wuxi Chemical
The main advantage of trading using opposite Innovative Medical and Wuxi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovative Medical position performs unexpectedly, Wuxi Chemical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wuxi Chemical will offset losses from the drop in Wuxi Chemical's long position.| Innovative Medical vs. Ningbo Fangzheng Automobile | Innovative Medical vs. Sanbo Hospital Management | Innovative Medical vs. Youngy Health Co | Innovative Medical vs. Shandong Sinoglory Health |
| Wuxi Chemical vs. Linewell Software Co | Wuxi Chemical vs. Digiwin Software Co | Wuxi Chemical vs. Innovative Medical Management | Wuxi Chemical vs. Eyebright Medical Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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